Hong Kong’s fintech strategy is grounded in a long-term vision: not just for innovation, but for regulatory transparency, predictability and global collaboration.
Speaking to The Fintech Times’ Mark Walker at the Dubai Fintech Summit, Joseph Chan, Under Secretary for Financial Services and the Treasury of the Hong Kong Special Administrative Region (SAR), shared how his background in investment banking and public office helps shape the city’s approach.
“I have a combination of industry experience in investment banking… and I know the political system, how it works,” said Chan, who spent years at Merrill Lynch, Standard Chartered and Crédit Agricole before entering government. “I was a full-time banker, part-time politician since 2011,” he added, referring to his elected role as a district councillor prior to joining the government in 2017.
Regulation with no surprises
Asked what sets Hong Kong apart in its regulatory approach to fintech, Chan outlined consistency and structure. “We pride ourselves with transparency, certainty and predictability,” he said. “You don’t want to have ambiguity… our laws are very clear. If you check the boxes, then you get your licence.”
Chan contrasted this rule-based approach with jurisdictions where discretion plays a larger role. “In Hong Kong, we don’t,” he said. “When we do any regulation change, we do industry consultation, then public consultation, then we go through our Legislative Council, more like a parliament equivalent.”
The result, he said, is a system that gives businesses time to prepare, provide feedback and avoid disruption. As an example, he pointed to Hong Kong’s stablecoin regulation: “We did our first round of stablecoin consultation two years ago, and then we did another round last year… We expect it to pass sometime this year.”
Innovation with guardrails
Striking the right balance between regulation and innovation is a core part of Hong Kong’s strategy, especially in emerging areas like virtual assets. “We stated very clearly: we believe that virtual asset is an asset class to stay,” said Chan. “However, we want to develop in a responsible and sustainable manner.”
That clarity came even in the wake of high-profile failures like FTX. “Some other jurisdictions… they flip-flop. They said they embrace, then after FTX they slam on the brakes, then they flip again,” said Chan. “In Hong Kong, we have been always stable and very clear.”
He pointed to the current framework for virtual asset exchanges, where 10 are now licensed, as proof that rigorous regulation can co-exist with innovation. Requirements include asset segregation, financial reporting and liquidity thresholds. “From our standpoint as a regulator… it’s quite simple: protect the investors,” said Chan.
A step-by-step approach to digital assets
Stablecoin regulation is next on the agenda, followed by regimes for OTC virtual asset services and custodians. “You will see that step by step… not like we drop this and go back. It’s like step by step, go with the market development,” Chan said.
He believes Hong Kong’s framework can help support real-world stablecoin adoption, particularly for cross-border trade. “We heard that there are certain trades done between Middle East and Africa… using stablecoin for settling those trades,” he said. But many institutions, he noted, want a jurisdiction with clear rules. “They said, okay, going forward, if there is any licensed stablecoin issuer in Hong Kong, then they rather pursue that.”
Global collaboration in practice
Chan stressed that Hong Kong is not working in isolation. “We have close dialogue with fellow regulators from around the world,” he said, referencing cooperation through FATF, the Financial Stability Board, IOSCO and more.
Bilateral cooperation is just as active. “The central bank in UAE and central bank in Hong Kong, they talk to each other very closely,” said Chan. “Same as the regulators, VARA here in Dubai and also the SFC in Hong Kong.”
That collaboration extends to infrastructure too with Chan pointing to Project mBridge, a cross-border CBDC initiative involving Hong Kong, mainland China, Thailand, the UAE and Saudi Arabia, as a strong example. “Last year, it already reached a minimum viable product stage,” he said.
Locally, Hong Kong’s Faster Payment System (FPS) is also seeing cross-border use. “We only have 7.5 million people, but over 16 million registrations… it handles about two million transactions per day,” said Chan. The system is now linked with Thailand’s PromptPay, enabling tourists from both sides to use digital payments seamlessly across borders.
Still the launchpad for China
Hong Kong continues to play a unique role as a gateway to mainland China, something Chan believes remains as relevant as ever. “Under ‘one country, two systems,’ we have preferential access to mainland China,” he said.
Beyond policy mechanisms like Stock Connect and Wealth Management Connect, Chan pointed to Hong Kong’s human capital. “They have the experience dealing with international investors… but they also know the latest market trends in mainland China.”
That combination, he said, is attractive for international companies looking to expand into the region. “A lot of companies would like to set up their business in Hong Kong and use Hong Kong to penetrate mainland China,” Chan said, across traditional finance, fintech and other sectors.
Building bridges in Dubai
This year marked Chan’s second visit to the Dubai Fintech Summit, and he came with a clear goal: to forge deeper ties between Hong Kong and the region’s growing fintech ecosystem.
“We have a delegate here from Hong Kong… fintech companies, venture capital,” he said. “I expect our companies here… could look for potential business expansion and development in this region.”
That includes promoting Hong Kong as a launchpad for fintechs eyeing the Asia market. “With Cyberport, we want to connect to the fintech companies here to show them what Hong Kong is about,” Chan said. “So that… when they want to go to Asia, develop their business there, or look for investors from Asia or from China, they can use Hong Kong as a launch pad.”
Support won’t end at the event, he added. “Going forward, we will provide support when they come to Hong Kong next time… to understand our regulatory landscape, connect to the community of fintech companies and investors. Our colleagues from Invest Hong Kong or our colleagues from Cyberport, can help them foster those connections.”
He also highlighted a concrete result of that cross-border intent: “Here there will be an MoU signed by a Hong Kong asset manager focusing on tokenisation of RWA and also a local fintech company here… so that’s very exciting.”
Chan left the door open for further announcements. “I’m sure a lot more good news will be prepared in the near future,” he said.
The post Why Hong Kong Is Betting on Clarity and Collaboration in Fintech Regulation appeared first on The Fintech Times.
